But along this intellectual course, studded with access to valuable discoveries—Suda was one of the first nanotechnology researchers to explore the idea of using biological molecules in computer chips—he allegedly cultured a second calling: in embezzlement and as a paid but undisclosed agent of corporations, as demonstrated by regulators' complaints that he signed off on.

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An examination of Suda's activities opens a door on a seldom-seen world of professorial misconduct involving industrial conflicts of interest, protection of public patent rights, and international efforts to win valuable technologies.

While U.S. universities encourage professors to make discoveries that will benefit economies regionally and nationally, events at U.C. Irvine and at two other University of California campuses highlight potentially costly failures in the system that regulates academic/industrial partnerships.

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Allegations of improprieties by Suda, 58, arose during a two-year investigation by the U.C. Irvine police, who seek his prosecution for allegedly embezzling as much as $300,000. The accusations involve a double-billing travel-expense scheme Suda acknowledged when confronted by university auditors in 2009.

Suda didn't answer an interview request made at his home in Fallbrook, California, where he lives with Coolidge amid an avocado grove on a ridge overlooking the Camp Pendleton Marine base.

Sgt. Mark Arnold, who supervises U.C. Irvine investigations, said in June his agency asked the Orange County District Attorney's Office to file theft charges against Suda. Since the alleged theft exceeded $150,000, police say a more severe complaint for white-collar offenses is under review. Prosecutors declined comment.

Acknowledging he deceived U.C. Irvine for years to hide secret payments from major Japanese communications companies, Suda paid a $14,000 fine to the state of California in February for multiple violations of the government code requiring him to disclose these payments.

During this same period, he was a full-time professor making $155,000 a year at U.C. Irvine's Donald Bren School of Information and Computer Sciences. In 2006, U.C. Irvine heralded his receipt of $1.35 million in research grants from U.S. and Japanese government agencies, putting him in an elite category. And he was constantly attending meetings abroad—traveling as much as 170 days a year, making him a little-known figure to some faculty at his home university.

These activities positioned him to advance U.C. Irvine research projects, but they also gave him access to the newest technological ideas his secret corporate funders could exploit.

While U.C. Irvine police agreed a Suda contract with one Japanese firm appeared to be a prescription for industrial espionage, no allegations of misappropriation of technology were included in the package sent to the district attorney, Arnold said. Nonetheless, Suda's handling of intellectual property and discoveries is being scrutinized by university administrators, the officer added.

This was not Suda's first brush with fiddling expenses, although U.C. Irvine administrators apparently were so enamored of Suda they overlooked his history. In 2009, as the current inquiry got underway, Suda acknowledged to school auditors that he had double-billed expenses a decade earlier. He paid the university between $20,000 and $30,000 for those offenses, but was allowed to remain as a researcher. The U.C. Irvine audit records for that offense were destroyed per campus policy, police say, and thus weren't available for the current criminal probe.

U.C. Irvine officials declined to discuss any aspect of the case. They only will say Suda left the university last October—just before the state probe of his illicit funding was initiated—but his continuing affiliation as emeritus professor remains under negotiation. (Last December, faculty were notified, via memo, that he was retiring.) Suda still is listed on the U.C. Irvine website, and represents himself to academics worldwide as being with the university.

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Misappropriation of technology and ideas that could produce valuable products is a major—but little-discussed—issue for public universities. Those institutions are charged with protecting taxpayer-funded discoveries and revenue from licensing fees on patented inventions.

In 2010, licensing fees for patented discoveries from all ten U.C. campuses came to $125 million. U.C. Irvine ranked sixth that year with $5.2 million.

While schools know what came in, there are no known estimates of losses from misappropriated technology. But in 2008, an unprecedented study found a third of the most valuable patents from U.S. universities were diverted so that only private individuals or firms profited.

That study did not name institutions or individuals and did not involve any U.C. campuses. But when told of the U.C. cases, lead author Gideon Markman, a management professor at Colorado State University in Fort Collins, said: "If this is happening in California, I suspect it is going on all over the country."

Nonetheless, public disclosure of any U.S. professors caught misappropriating technology is extremely rare.

A case at U.C. San Diego suggests that even when an apparent loss of technology is documented, it may not be pursued for sanctions. In that instance, a San Diego company, NuVasive, Inc., sought a patent in 2007 on a spinal-repair device; a UCSD neurosurgeon was listed as co-inventor. U.C. policies require professors to tell administrators of potentially patentable inventions; state records show no record the neurosurgeon made such a disclosure.

The neurosurgeon, Dr. William Taylor, was fined $12,000 in January by the state as part of a settlement for failing to disclose income from the firm, which had been paying him stock options and consulting fees for years. Despite that settlement, interviews and records indicate neither the university nor state officials sought to recover any potential lost money or public technology rights.

In California, the Fair Political Practices Commission, which typically handles funding violations by politicians or government officials, oversees public university research conflicts of interest. Each U.C. campus has policies that require professors to disclose—under threat of perjury—financial interests of more than $500 in a company that funds their research.

But commission actions against U.C. professors are rare. Three professors fined in the last year—Suda, Taylor and a physician at UCLA, Jeffrey Wang—were the first such sanctions in nine years. And no one at the FPPC could recall an earlier case.

(The previous Fair Political Practices Commission fine in 2002 was based on professorial offenses in 1997-98. That case also involved a U.C. Irvine researcher, one who was associated with a high-flying company seeking an AIDS drug with the assistance of Jonas Salk. Dr. Darryl M. See paid a record $24,000 fine for a dozen counts of failing to disclose financial interest in companies from which he received or sought to receive research funds. Two counts involved his seeking research funds from Immune Response Corp., a publicly traded firm that in the 1990s regularly deployed Salk like a stock barker. The company's drug results never equaled the hype. See—who surrendered his medical license in 2007 for gross negligence and incompetence related to bogus research treatments after he left U.C. Irvine—couldn't be reached for comment.)

Additionally, none of the recent cases arose from actions by UC campus administrators charged with monitoring such conflicts. All started with complaints by outside parties—raising serious questions about the effectiveness of the current regulatory system.

State Senator Leland Yee, a San Francisco Democratic who has been a harsh critic of U.C. executives, called the U.C. regulatory system "window dressing."

"I believe they don't want to know anything; it is in their interest to let professors double- or triple-dip," he said. "The problem is the conflict laws are flaunted."

U.C. campuses, like all U.S. universities that receive federal research funds, have staff and committees to monitor professors' grants and activities with private firms. There are policies and procedures designed to ensure professors teach students and conduct research properly, avoid inappropriate conflicts of interest with industry, and protect public-university ownership of discoveries funded by taxpayers. While industry grants are accepted and often encouraged, conflict-of-interest rules are designed to ensure taxpayer-funded professors aren't working entirely for industry.

But the regulatory system is fraught with problems, as university administrators balance competing goals. The result is often little or no enforcement—which means public universities easily can lose valuable technology and the substantial sums from licensing discoveries.

"It looks like the regulatory system doesn't work," said Markman, who is checking the loss of patents for a new, larger study that includes some U.C. campuses. That study is to be submitted for peer-reviewed publication later this year.

Meanwhile, top research professors who can bring in governmental research grants are recruited like star athletes. In fields such as computer science, engineering and biomedicine, they are encouraged to make discoveries that can be spun off to for-profit firms.

And when development-prone researchers start their own firms, the luckiest can become millionaires. And if such a professor is unhappy with his or her opportunities at one campus, they may jump to another university offering a freer hand to monetize their research.

At U.C. campuses, which are international leaders in fostering the technology-transfer process, there are added pressures: Depleted budgets hinder campuses from keeping scientific luminaries happy through costly new equipment and labs.

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While the scarcity of professorial sanctions might be interpreted as demonstrating exceptional conscientiousness by academics, critics say the institutions turn a blind eye toward professorial malfeasance.

In the UCSD case, Taylor failed to report an economic interest in a company whose equipment he was using or planning to use in multiple clinical trials at the university's hospitals.

He acknowledged violations from 2008-09 in four counts involving NuVasive Inc., a publicly traded San Diego firm whose sales skyrocketed in recent years to $500 million.

While records show he repeatedly denied reportable funding from NuVasive, he actually received consultant fees or a salary since 2003, earning royalties on devices and picking up stock options. Taylor also was a public advocate for NuVasive, speaking to stock analysts, attending conferences and even heading a company medical division.

The complaints against him arose not from the UCSD administrators, who easily could have been aware of this activity, but from an attorney suing Taylor for alleged medical malpractice involving NuVasive technology. (That case is tentatively set to go to trial in January.)

As a part of the 2009 civil lawsuit, attorney Robert Vaage uncovered UCSD documents that revealed Taylor's disclosure failures.

After UCSD officials purportedly dragged their feet on providing conflict-of-interest records, Vaage said, he secured the documents, then reported multiple potential offenses to the FPPC. "Taylor knowingly submitted false information" under threat of perjury to UCSD, Vaage wrote to the FPPC in his complaint in June 2010.

In the spring of 2010, Taylor was promoted and received a raise, records show. Last November, as the commission's investigation of Taylor was wrapping up, UCSD Chancellor Marye Anne Fox received a National Medal of Science from President Barack Obama; her nomination was based on aggressively pushing university/industry partnerships.

At UCSD, Vaage told Miller-McCune.com, "It was hear no evil, see no evil; they were looking the other way."

Taylor didn't respond to interview requests; his office said he was on sabbatical. A NuVasive official said Taylor was in Brazil; NuVasive devices are studied in Brazil.

One Taylor attorney said there was "an inadvertent failure to disclose" his potential conflicts. But an FPPC report on the Taylor case said his "failure to not properly disclose his economic interests ... was significant" and "had the effect of avoiding any conflict of interest scrutiny" by UCSD.

UCSD officials declined comment. Douglas Magde, a biochemist who co-chairs the UCSD review committee on conflicts of interest, said he was only vaguely aware of the case. The review committee never was officially informed about the state investigation or fine of Taylor, he said.

Magde likened the Fair Political Practices Commission fine to "a bootlegger during Prohibition being punished for tax evasion." After nearly a dozen years on the committee, Magde said he believed it has had "a substantial influence on the behavior of professors."

But, he added, it "was remarkable how few" violations have come to light.

UCSD records also show there were questions about his use of NuVasive devices in his clinical research trials at university hospitals. A UCSD policy forbids its physicians from using devices under study on their patients when the physician has an economic interest in the companies making the equipment.

Last December, UCSD's Human Research Protections Program reviewed Taylor's "failures to disclose potential conflicts" in four studies, said Michael Caligiuri, medical director of the program. But it was decided in January that the conflict problems were resolved, he said, and "did not jeopardize" study participants' welfare or safety. Taylor also notified effected patients of the conflict issue, Caligiuri added.

• • • • • • • • • • • • • • •

The UCSD policy was an outgrowth of nationwide concern by Congress and consumer groups about physicians receiving surreptitious funding from pharmaceutical companies and device-makers—potentially corrupting studies, journal articles and treatments in which they had an economic interest.

A UCLA conflict-of-interest case that concluded last August was a direct result of intervention by U.S. Senator Chuck Grassley, the Iowa Republican who has led the drive to crack down on physician conflicts of interest.

UCLA officials apparently took no action to check if Wang was in compliance with university rules. That May, Grassley sent a detailed letter of questions to UCLA executives, which prompted a university inquiry. By that June, then-UCLA research vice chancellor Roberto Peccei wrote to Grassley that Wang had "violated university guidelines" by failing to promptly report financial interests in six medical devices whose equipment he used on patients in clinical trials.

Under the settlement in August 2010, Wang paid a $10,500 fine—acknowledging the three counts against him for accepting grants ranging from $50,000 to $100,000 from three companies in which he had an undisclosed financial interest. Wang remains at UCLA, but is no longer a center director; he did not respond to interview requests.

A UCLA spokesman said the university "takes these matters very seriously," but it "cannot substantially verify" what professors disclose about industry payments.

Last November, Yudof's office filed the commission complaint on Suda, writing he failed to report receiving "significant amounts" from research sponsors. The U.C. Irvine police criminal probe had been underway for a year and a half at that point.

The ball started rolling on the criminal investigation in the spring of 2009 with whistleblower complaints that Suda allegedly was forcing students to write phony travel receipts to perpetuate a double-billing scheme—where he would be reimbursed twice, by U.C. Irvine and a Japanese firm, such as KDDI Inc.

KDDI, a large, Tokyo-based communications firm, paid Suda the illegal consulting fees that precipitated the commission fine. In the settlement, Suda also acknowledged hiding unlawful funding in 2007-08 from computer giant NEC Global, a KDDI partner, when the Tokyo firm was funding $50,000 of his research at U.C. Irvine. KDDI and NEC didn't respond to interview requests.

• • • • • • • • • • • • • • •

U.C. Irvine internal auditors secretly began an inquiry, obtaining copies of two sets of records for nearly $10,000 in expenses—which U.C. Irvine auditor Michael Bathke indicated in court records was an "example of double-billing and evidence of fraud."

Auditors then confronted Suda in meetings that August. U.C. Irvine officials quietly copied his university computer memory beforehand. After the meetings, 14 gigabytes of stored records on Suda's computer were removed or destroyed, court records say.

These details were contained in sworn affidavits in support of search warrants secured by U.C. Irvine police in August 2009. The first search and seizure of documents and computers was at Suda's campus office and his campus home, where he operated a private consulting firm, University Netgroup Inc. This led police to a second search at the Fallbrook home owned by his wife, Coolidge.

In one meeting, he disclosed double-billing U.C. Irvine for about $75,000, which already had been paid to him by NTT DoCoMo Global. In a subsequent meeting, he offered to pay U.C. Irvine $330,000 for five years of improper reimbursements.

If Suda is convicted of such a theft, his may be the largest embezzlement case ever at U.C. Irvine—eclipsing the 2009 conviction of the university's director of creative and administrative services, Diana K. Palmer. She was jailed for a year for stealing more than $150,000 during a decade of working directly for the chancellor's office.

Meanwhile, despite the international implications of Suda's activities, and his acknowledgement he also double-billed travel expenses involving the National Science Foundation, U.C. Irvine police say no federal agencies are involved in any inquiries.

The NSF Office of Inspector General sent staff to Irvine to talk with authorities there, but university police say they knew of no further action by the agency; NSF officials declined comment. Suda was a director for the NSF's computer networking research program from 1996-99.

When the three U.C. researchers signed the campus economic interest statements, they did so under threat of perjury. But Fair Political Practices Commission Director Roman Porter, who announced in mid-August that he would leave his position in October, said none of the cases were referred to the state attorney general for possible criminal charges.

Neither the commission nor the U.C. campuses reported Taylor and Wang to the California Medical Board, which licenses physicians and can take action against them for perjury.

And U.C. officials apparently are not looking to check the breadth of such problems. "The university cannot substantially verify" what professors say on the disclosure forms, said U.C. spokesman Steve Montiel.

However, some state legislators see the issue differently.

"This is one of the most intelligent university systems in the world, and it can't ensure there aren't conflicts of interest?" Yee said. "It is incredible to me."

An audit should be done to scrutinize how the system is addressing potential conflicts of interest, he added.

Regarding the crisis in American research universities, Louisiana State University System President John V. Lombardi argues that when athletics are on the cutting block, he'll see that as a sign of disaster.

In a Q&A, historian Robert M. Berdahl, president of the Association of American Universities, (since retired) describes how fiscal pressures at the state level undermine research universities already battered by the recession.

In a Q&A session, computer scientist Francine Berman, vice president for research at Rensselaer Polytechnic Institute, explains how funding decisions made in Washington help or hinder innovation at universities.